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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the period ended June 30, 1996
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from to
--------- ---------
Commission File Number 0-8667
------
PUBLIC STORAGE PROPERTIES, LTD.
----------------------------------------------------
(Exact name of registrant as specified in its charter)
California 95-3196921
- ------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
701 Western Avenue
Glendale, California 91201
- ---------------------------------------- ----------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (818) 244-8080
--------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
<PAGE>
INDEX
Page
----
PART I. FINANCIAL INFORMATION
Condensed balance sheets at June 30, 1996
and December 31, 1995 2
Condensed statements of income for the three and six
months ended June 30, 1996 and 1995 3
Condensed statement of partners' deficit for the
six months ended June 30, 1996 4
Condensed statements of cash flows for the
six months ended June 30, 1996 and 1995 5
Notes to condensed financial statements 6
Management's discussion and analysis of
financial condition and results of operations 7-8
PART II. OTHER INFORMATION 9
<PAGE>
<TABLE>
<CAPTION>
PUBLIC STORAGE PROPERTIES, LTD.
CONDENSED BALANCE SHEETS
June 30, December 31,
1996 1995
------------------ -------------------
(Unaudited)
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 130,000 $ 89,000
Rent and other receivables 35,000 42,000
Real estate facilities, at cost:
Buildings and equipment 7,597,000 7,493,000
Land 2,511,000 2,511,000
------------------ -------------------
10,108,000 10,004,000
Less accumulated depreciation (4,839,000) (4,644,000)
------------------ -------------------
5,269,000 5,360,000
------------------ -------------------
Other assets 240,000 354,000
------------------ -------------------
Total assets $ 5,674,000 $ 5,845,000
================== ===================
LIABILITIES AND PARTNERS' EQUITY
Accounts payable $ 23,000 $ 77,000
Deferred revenue 116,000 132,000
Due to affiliate 130,000 130,000
Notes payable 15,775,000 16,351,000
Partners' deficit:
Limited partners' deficit, $500 per
unit, 20,000 units authorized,
issued and outstanding (7,700,000) (8,052,000)
General partners' deficit (2,670,000) (2,793,000)
------------------ -------------------
Total partners' deficit (10,370,000) (10,845,000)
------------------ -------------------
Total liabilities and partners' deficit $ 5,674,000 $ 5,845,000
================== ===================
See accompanying notes.
2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PUBLIC STORAGE PROPERTIES, LTD.
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------------------- -------------------------------------
1996 1995 1996 1995
----------------- ------------------ ----------------- -----------------
(Restated)
REVENUE:
<S> <C> <C> <C> <C>
Rental income $ 984,000 $ 963,000 $ 1,948,000 $ 1,897,000
Dividends and other income
(including dividends from marketable
securities of affiliate in 1995) 2,000 8,000 2,000 18,000
----------------- ------------------ ----------------- -----------------
986,000 971,000 1,950,000 1,915,000
----------------- ------------------ ----------------- -----------------
COSTS AND EXPENSES:
Cost of operations 236,000 219,000 467,000 457,000
Management fees paid to affiliate 51,000 58,000 103,000 114,000
Depreciation 98,000 87,000 195,000 168,000
Administrative 12,000 13,000 21,000 25,000
Environmental cost - - - 22,000
Interest expense 374,000 383,000 689,000 771,000
----------------- ------------------ ----------------- -----------------
771,000 760,000 1,475,000 1,557,000
----------------- ------------------ ----------------- -----------------
NET INCOME $ 215,000 $ 211,000 $ 475,000 $ 358,000
================= ================== ================= =================
Limited partners' share of net income
($23.50 per unit in 1996 and $17.70
per unit in 1995)
$ 470,000 $ 354,000
General partners' share of net income 5,000 4,000
----------------- -----------------
$ 475,000 $ 358,000
================= =================
</TABLE>
See accompanying notes.
3
<PAGE>
PUBLIC STORAGE PROPERTIES, LTD.
CONDENSED STATEMENT OF PARTNERS' DEFICIT
(UNAUDITED)
Total
Limited General Partners'
Partners Partners Deficit
------------ ------------ ------------
Balance at December 31, 1995 ($8,052,000) ($2,793,000) ($10,845,000)
Net income 470,000 5,000 475,000
Equity transfer (118,000) 118,000 -
----------- ------------ ------------
Balance at June 30, 1996 ($7,700,000) ($2,670,000) ($10,370,000)
============ ============ ============
See accompanying notes.
4
<PAGE>
<TABLE>
<CAPTION>
PUBLIC STORAGE PROPERTIES, LTD.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended
June 30,
--------------------------------------------
1996 1995
------------------- -------------------
Cash flows from operating activities:
<S> <C> <C>
Net income $ 475,000 $ 358,000
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation 195,000 168,000
Decrease in rent and other receivables 7,000 21,000
Amortization of prepaid management fees 103,000 -
Decrease in prepaid loan fees 17,000 16,000
Increase in other assets (6,000) -
(Decrease) increase in accounts payable (54,000) 78,000
Decrease in deferred revenue (16,000) (11,000)
------------------- -------------------
Total adjustments 246,000 272,000
------------------- -------------------
Net cash provided by operating activities 721,000 630,000
------------------- -------------------
Cash flows from investing activities:
Additions to real estate facilities (104,000) (204,000)
------------------- -------------------
Net cash used in investing activities (104,000) (204,000)
------------------- -------------------
Cash flows from financing activities:
Principal payments on mortgage notes payable (576,000) (516,000)
------------------- -------------------
Net cash used in financing activities (576,000) (516,000)
------------------- -------------------
Net increase (decrease) in cash and cash equivalents 41,000 (90,000)
Cash and cash equivalents at the beginning of the period 89,000 162,000
------------------- -------------------
Cash and cash equivalents at the end of the period $ 130,000 $ 72,000
=================== ====================
Supplemental schedule of noncash investing and financing activities:
Increase in fair value of marketable securities $ - $ (80,000)
=================== ====================
Unrealized gain on marketable securities
- 80,000
=================== ====================
</TABLE>
See accompanying notes.
5
<PAGE>
PUBLIC STORAGE PROPERTIES, LTD.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. The accompanying unaudited condensed financial statements have been
prepared pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to
such rules and regulations, although management believes that the
disclosures contained herein are adequate to make the information presented
not misleading. These unaudited condensed financial statements should be
read in conjunction with the financial statements and related notes
appearing in the Partnership's Form 10-K for the year ended December 31,
1995.
2. In the opinion of management, the accompanying unaudited condensed
financial statements reflect all adjustments, consisting of only normal
accruals, necessary to present fairly the Partnership's financial position
at June 30, 1996, the results of its operations for the three and six
months ended June 30, 1996 and 1995 and its cash flows for the six months
then ended.
3. The results of operations for the three and six months ended June 30, 1996
are not necessarily indicative of the results expected for the full year.
4. In 1995, the Partnership prepaid eight months of 1996 management fees at a
total cost of $137,000. The Partnership expensed $103,000 of the prepaid
management fees for the six months ended June 30, 1996. The balance of
prepaid management fees, $34,000, is included in other assets in the
Balance Sheet at June 30, 1996.
5. Certain prior year amounts have been reclassified to conform with the 1996
presentation.
6
<PAGE>
PUBLIC STORAGE PROPERTIES, LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
- ---------------------
Three and six months ended June 30, 1996 compared to three and six months ended
June 30, 1995:
The Partnership's net income for the six months ended June 30, 1996 was
$475,000 compared to $358,000 for the six months ended June 30, 1995,
representing an increase of $117,000, or 33%. The Partnership's net income for
the three months ended June 30, 1996 was $215,000 compared to $211,000 for the
three months ended June 30, 1995, representing an increase of $4,000, or 2%.
These increases are primarily a result of increased rental income combined with
decreased interest expense due to lower outstanding loan balances in 1996
compared to 1995, partially offset by a decrease in dividend income. During
1995, the Partnership held 39,911 shares of common stock in Public Storage,
Inc., an affiliate of the Partnership. In November 1995, the Partnership sold
these shares.
Rental income was $1,948,000 compared to $1,897,000 for the six months
ended June 30, 1996 and 1995, respectively, representing an increase of $51,000
or 3%. Rental income was $984,000 compared to $963,000 for the three months
ended June 30, 1996 and 1995, respectively, representing an increase of $21,000
or 2%. These increases are primarily attributable to increased occupancy levels
and increased rental rates. The weighted average occupancy levels at the
mini-warehouse facilities were 91% and 90% for the six months ended June 30,
1996 and 1995, respectively. Realized rent for the six months ended June 30,
1996 increased to $.71 per occupied square foot from $.69 per occupied square
foot for the six months ended June 30, 1995.
Cost of operations (including management fees paid to affiliate) decreased
$1,000 to $570,000 from $571,000 for the six months ended June 30, 1996 and
1995, respectively. Cost of operations (including management fees paid to
affiliate) increased $10,000 to $287,000 from $277,000 for the three months
ended June 30, 1996 and 1995, respectively. This increase is mainly attributable
to increases in repairs and maintenance, payroll, and advertising expenses,
partially offset by a decrease in management fees paid to an affiliate.
In 1995, the Partnership prepaid eight months of 1996 management fees on
its mini-warehouse operations (based on the management fees for the comparable
period during the calendar year immediately preceding the prepayment) discounted
at the rate of 14% per year to compensate for early payment. During the six
month period ended June 30, 1996, the Partnership expensed $103,000 of prepaid
management fees. The amount is included in management fees paid to affiliate in
the condensed statements of income. As a result of the prepayment, the
Partnership saved approximately $14,000 in management fees, based on the
management fees that would have been payable on rental income generated in the
six months ended June 30, 1996 compared to the amount prepaid.
7
<PAGE>
Interest expense decreased $82,000 to $689,000 from $771,000 for the six
months ended June 30, 1996 and 1995, respectively. This decrease is mainly
attributable to lower outstanding principal balances on the Partnership's notes
payable.
In 1995, the Partnership incurred cost of $22,000 to conduct environmental
assessments of its properties to evaluate the environmental condition of and
potential environmental liabilities of such properties. Those assessments did
not indicate any environmental contamination of any of its property sites which
individually or in the aggregate would be material to the Partnership's overall
business, financial condition, or results of operations. No such cost was
incurred in 1996.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Cash generated from operations ($721,000 for the six months ended June 30,
1996) has been sufficient to meet all current obligations of the Partnership,
including principal repayments of the Partnership's notes payable.
For the six months ended June 30, 1995, the Partnership recognized $18,000
in dividends from 39,911 shares of common stock (marketable securities) held in
Public Storage, Inc. ("PSI"), one of the general partners in the Partnership.
The marketable securities were sold in November 1995, and, as a result, no such
dividend income was earned in 1996.
In the fourth quarter of 1990, quarterly distributions were discontinued to
enable the Partnership to increase its cash reserves for principal payments that
commenced in 1993.
8
<PAGE>
PART II. OTHER INFORMATION
ITEMS 1 through 5 are inapplicable.
ITEM 6 Exhibits and Reports on Form 8-K
(a) The following Exhibit is included herein:
(27) Financial Data Schedule
(b) Form 8 - K
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATED: August 13, 1996
PUBLIC STORAGE PROPERTIES, LTD.
BY: Public Storage, Inc.
General Partner
BY: /s/ Ronald L. Havner, Jr.
---------------------------
Ronald L. Havner, Jr.
Senior Vice President and Chief
Financial Officer
(principal financial officer)
9
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000202953
<NAME> PUBLIC STORAGE PROPERTIES , LTD.
<MULTIPLIER> 1
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1
<CASH> 130,000
<SECURITIES> 0
<RECEIVABLES> 35,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 165,000
<PP&E> 10,108,000
<DEPRECIATION> (4,839,000)
<TOTAL-ASSETS> 5,674,000
<CURRENT-LIABILITIES> 269,000
<BONDS> 15,775,000
0
0
<COMMON> 0
<OTHER-SE> (10,370,000)
<TOTAL-LIABILITY-AND-EQUITY> 5,674,000
<SALES> 0
<TOTAL-REVENUES> 1,950,000
<CGS> 0
<TOTAL-COSTS> 570,000
<OTHER-EXPENSES> 216,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 689,000
<INCOME-PRETAX> 475,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 475,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 475,000
<EPS-PRIMARY> 23.50
<EPS-DILUTED> 23.50
</TABLE>
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